How To More Effectively Use A Cash Back Credit Card

Information verified correct on September 29th, 2016
Using your cash-back credit card effectively requires regular usage and investing the rewards. Using your cash-back credit card effectively requires regular usage and investing the rewards.

How to use a cash back credit card to earn more cash and rewards

Although some criticism has lately been leveled at such reward schemes and how they really benefit the customer, there are ways in which you can ensure that you use your benefits optimally. These would include using your card on a regular basis, investing the cash back you receive instead of using it, choosing cards which combine rewards benefits with better interest and annual fees structures. Lastly it makes sense to not spend so much on your cash back credit card that the interest payable on your balance exceeds your benefits.

How to Benefit From Your Cash Back Card More Effectively

With over 14 million credit cards in circulation in Australia today, customers have a wide variety to choose from, from interest rates and fees to perks, condition and benefits. These benefits are usually cash back rewards, Frequent Flyer miles or points which can be redeemed on shopping, travel and services. Some rewards programs also offer insurance on items you purchase and also travel insurance. Criticism has been leveled against reward schemes lately, but with some thought and research, you can maximise your benefits from your own cash back credit card and reward scheme.

Here Are Some Ways to Use Your Cash Back Credit Card Effectively

1. Regularly use your cash back credit card

When you use your card for everyday purchases or for fuel, benefits can quickly add up. But keep track of your spending to ensure that you don’t exceed the limit of the cash back allowed by your provider. Some credit card providers also offer cash back in the form of rebates when you go shopping. Double points can be earned if your card is sponsored by large businesses, and these can be exchanged for bonuses to buy gifts or items with for you and your family. Check the affiliate company your card is linked to so that you can ensure that you will actually be able to use the rewards and check the date before which you are supposed to use the points earned. You can also use your cash back credit card to pay bills and so earn more points.

2. Don’t spend the rewards, rather invest them

Some reward programs, will automatically invest any cash back owed to you on your cash back credit card into investment or retirement accounts. This is a great way to save more as you will also earn interest on the money, but this should not be the only money you put into a savings account.

3. Choose a cash back credit card which combines cash back with other bonuses and benefits

Double reward points for the first couple of months, zero or very low annual fees, low interest rate, free enrollment into the rewards program, no capping and other such promotional offers should all be considered when choosing the card with the right fit for your purposes. If you shop often and also for larger purchases, you will benefit from more points earned as well as lower interest payable for the whole year. This way you are better off every time.

4. Be careful not to spend too much on your cash back credit card

You have to spend enough each year to offset the annual fee you are being charged. At the same time if you spend too much, and your card provider has capped the amount of cash back you are eligible to receive from your card, any expenditure over that limit will be negated by the amount of interest you will have to pay on that amount. Spend only that which you can to pay your credit card back in full at the end of each month. It makes excellent sense to know your balance owed on your card, and be aware of all costs, fees, charges and interest you are liable for on your cash back credit card.

Comparison: Credit cards with cash gift cards as part of their rewards program

Rates last updated September 29th, 2016
Rewards Points per $ spent (AMEX) Rewards Points per $ spent (VISA/MC) Bonus Points Annual fee
HSBC Platinum Credit Card
Receive a full annual fee refund and save $149 if you meet the $6,000 spend requirement. Enjoy a balance transfer offer and platinum card benefits such as complimentary insurances and concierge services.
0 1 $149 p.a. Go to site More info
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
Receive an exclusive $129 Virgin Australia Gift Voucher each year when you meet the spend requirement. Also earn 2 bonus Velocity Points in the first 3 months on everyday spend.
0 0.66 $64 p.a. annual fee for the first year ($129 p.a. thereafter) Go to site More info
Virgin Australia Velocity High Flyer Card - 30k Bonus Points offer
Receive 30,000 bonus Velocity Points and earn 1 Velocity Points per $1 spent. Receive an exclusive $129 Virgin Australia Gift Voucher and two complimentary Single Entry Virgin Australia domestic Lounge passes each year.
0 1 30,000 bonus points $144 p.a. annual fee for the first year ($289 p.a. thereafter) Go to site More info
Commonwealth Bank Business Platinum Awards credit card
Earn up to 3 Awards points per dollar spent, enjoy complimentary insurances and $0 annual fee for the first year.
3 1 $0 p.a. annual fee for the first year ($300 p.a. thereafter) Go to site More info
Virgin Australia Velocity Flyer Card - Bonus Points and Balance Transfer Offer
Earn up to bonus Velocity Points. Redeem your Velocity Points for more flights or other great rewards.
0 1 $64 p.a. annual fee for the first year ($129 p.a. thereafter) More info
Virgin Australia Velocity Flyer Card - 0% Interest Offer
Receive 0% p.a. for 12 months on purchases, 0% p.a. for 6 months balance transfers and an exclusive $129 Virgin Australia Gift Voucher every year.
0 0.66 $129 p.a. Go to site More info
HSBC Platinum Qantas Credit Card
Receive 60,000 bonus Qantas Points on eligible spend within 3 months. Enjoy access to premium benefits and complimentary insurance.
0 1 60,000 bonus points $199 p.a. Go to site More info
American Express Platinum Card
Receive 80,000 Membership Rewards Bonus Points when you meet the minimum spend requirement and earn up to 3 points per dollar spent. Gain access to travel insurance, $300 Platinum Travel Credit every year and access to 800 VIP airport lounges.
1 0 80,000 bonus points $1,200 p.a. Go to site More info
Citi Rewards Platinum Card - Cashback Offer
Earn $250 cashback on eligible spend, plus enjoy 0% p.a. balance transfer offer for 12 months, discounted annual fees for the life of the card and a complimentary travel insurance.
0 1.25 $99 p.a. annual fee for the first year ($199 p.a. thereafter) Go to site More info
ANZ Rewards Credit Card
Get 25,000 bonus Reward Points after your first eligible purchase is made within 3 months of card approval and earn 1.5 points per dollar spent.
1.5 0.75 25,000 bonus points $80 p.a. Go to site More info
ANZ Rewards Platinum
Receive 50,000 bonus Reward Points after your first eligible purchase is made within 3 months of card approval and earn up 2 Reward Points for every dollar spent on purchases.
2 1 50,000 bonus points $95 p.a. Go to site More info

Compare Credit Cards with Cashback

Rates last updated September 29th, 2016
Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
ANZ Platinum Credit Card - Exclusive Offer
Receive $200 back when you spend $500 in the first 3 months. Also enjoy a $0 annual fee for the first year.
19.74% p.a. $0 p.a. annual fee for the first year ($87 p.a. thereafter) Go to site More info
American Express Essential Credit Card
Receive a $50 credit on eligible spend and get Smartphone screen insurance combined with a no annual fee for life card. Also enjoy a 0% p.a. balance transfer rate for 12 months.
14.99% p.a. 0% p.a. for 12 months with 1% balance transfer fee $0 p.a. Go to site More info
Virgin No Annual Fee Credit Card
$100 cashback and a no annual fee card with balance transfer offer. Spend criteria applies for cashback offer.
18.99% p.a. 0% p.a. for 18 months with 2% balance transfer fee $0 p.a. Go to site More info
Citi Rewards Platinum Card - Cashback Offer
Earn $250 cashback on eligible spend, plus enjoy 0% p.a. balance transfer offer for 12 months, discounted annual fees for the life of the card and a complimentary travel insurance.
20.99% p.a. 0% p.a. for 12 months $99 p.a. annual fee for the first year ($199 p.a. thereafter) Go to site More info

Compare Cash Back Transaction Accounts

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Credit Cards Comparison

Rates last updated September 29th, 2016
Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
Enjoy a 0% p.a. balance transfer offer for 18 months and also earn 2 bonus Velocity Points in the first 3 months on everyday spend.
20.74% p.a. 0% p.a. for 18 months $64 p.a. annual fee for the first year ($129 p.a. thereafter) Go to site More info
ME Bank frank Credit Card
Enjoy a low and consistent interest rate on purchases and cash advances, combined with no annual fee.
11.99% p.a. $0 p.a. Go to site More info
St.George Vertigo Visa
Introductory offer of 0% p.a. for 18 months on balance transfers and 1% p.a. for 12 months on purchases, plus a low annual fee.
1% p.a. for 12 months (reverts to 13.24% p.a.) 0% p.a. for 18 months $55 p.a. Go to site More info
HSBC Platinum Credit Card
Receive a full annual fee refund and save $149 if you meet the $6,000 spend requirement. Enjoy a balance transfer offer and platinum card benefits such as complimentary insurances and concierge services.
19.99% p.a. 0% p.a. for 15 months $149 p.a. Go to site More info

* The credit card offers compared on this page are chosen from a range of credit cards CreditCardFinder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing cards.

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